Minimum-wage battle may be brewing

Maura Reynolds

During his news conference Wednesday, President Bush said he was optimistic about working on a range of issues with the Democrats who will lead Congress in January. He said he supported a $2.10 increase in the federal minimum wage, which is $5.15 an hour -- a proposal that is a top priority for Democrats. But Bush said he wanted to pair the increase with a cut in taxes and regulations to make it less costly for small businesses.

Efforts to link a hike in the minimum wage to tax cuts have repeatedly failed during Bush's time in office, despite Republican control of Congress.

Democrats have objected to linking the wage increase to tax cuts, and Drew Hammill, a spokesman for incoming House Speaker Nancy Pelosi (D-San Francisco), said she was not interested in such an arrangement. But shortly afterward, Hammill altered his response. He said that Pelosi preferred a bill unencumbered by tax cuts but that "House Democrats have long supported tax changes that would benefit small business" and would look at such proposals.

Still, there is strong opposition to the idea among Democrats.

"Given that nearly a decade has passed since the last minimum-wage increase, no one can seriously believe that the proposed increase will harm the small-business sector," said Rep. George Miller (D-Martinez), incoming chairman of the House Education and Workforce Committee. "More than half the states already have laws setting their own minimum wages above $5.15 per hour."

Signaling a potentially difficult domestic policy road, the president said that in addition to the minimum wage, he hoped to work with Democrats on overhauling Social Security and Medicare -- two issues that have defied such efforts for years.

Bush also said he would work with Democrats to pass free-trade agreements and a comprehensive rewriting of immigration laws, and to end the practice of "earmarking," in which lawmakers pepper broad spending bills with pet projects for districts.